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El Salvador’s decision to make Bitcoin legal tender worries Bank of England

El Salvador made history when the country decided to make Bitcoin legal tender on September 7 this year.

Bank of England / Image by: Wikimedia Commons

Mon, 29 Nov 2021, 10:54 am UTC

El Salvador has wholly embraced the crypto economy as the first country to adopt Bitcoin (BTC) as legal tender alongside the U.S. dollar. However, the Bank of England has expressed concerns over this decision

“It concerns me that a country would choose it as its national currency,” Bank of England Governor Andrew Bailey said at the Cambridge University student union Thursday, according to Cryptoslate. El Salvador made history when the country decided to make Bitcoin legal tender on September 7 this year.

However, Bailey questioned the decision citing the crypto’s price volatility. “What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have,” he added.

The Bank of England Governor also cited the International Monetary Fund’s statements opposing El Salvador’s decision to make BTC legal tender. The IMF warned that using Bitcoin as national currency carries various risks associated with crypto.

“Given bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability,” the IMF said, according to Bitcoin.com. “Its use also gives rise to fiscal contingent liabilities. Because of those risks, bitcoin should not be used as a legal tender.”

However, El Salvador President Nayib Bukele merely brushed off the Bank of England’s concerns. In a Twitter post in response to Bailey’s statements, Bukele hinted doubts on the governor’s supposed concerns for El Salvadorians.

“Bank of England is ‘worried’ about El Salvador’s adoption of bitcoin? Really? I guess Bank of England’s interest in the well-being of our people is genuine. Right? I mean, they have always cared about our people. Always. Gotta love Bank of England,” Bukele tweeted on November 28.

In fact, the El Salvador President also expressed concern of his own. “I’m really concerned about Bank of England printing money out of thin air,” he later wrote.

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